Can EMC 'Unite the World Through Content'? Page 3


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Inside the ECM World

Why did EMC turn to the content management space? The answer is simple, as Tucci revealed on the conference call. "First, and most importantly, content management is a perfect fit for EMC's strategic direction of information lifecycle management. I believe content management is becoming the single fastest growing software segment in the enterprise."

Statements like that are what make executives like Scott Testa salivate. Testa, chief operating officer of midmarket ECM provider Mindbridge Solutions, reports EMC's announcement to buy one of the largest fish in his company's pond caused a clamor in the space and validated an industry that has seen its fair share of consolidation in the last few weeks.

"I'm not surprised that Documentum was acquired," says Testa. "I was kind of surprised who it was that bought them."

But more than that, Testa reports that what was widely perceived to be a high valuation of the company is what makes the remaining players excited.

"The general consensus from the market is that EMC is overpaying for the acquisition," Testa says. "That is a very good sign. It certainly validates the rest of us. Maybe it wasn't quite as high as it would have been in the dot-com days, but it was very, very good from our company's perspective. It wasn't a fire sale."

Like Tucci, Testa believes ECM is destined for great growth over the next few years, perhaps multiplying from what many analysts see as a current $8 to $10 billion figure. "There is room for growth. It will get more complex as more companies see the value of capturing and distributing data to employees and to their stakeholders."

Testa also feels EMC's move could trigger additional consolidation in the space. Major players such as Interwoven, File Net, and Open Text might pick off one another. As an example of companies in the space looking to build out there wares, Documentum purchased eRoom, while Interwoven moved to acquire iManage this past August. Both buyers succeeded in adding collaboration capabilities to their content management platforms.

Still, there is bound to be some head scratching. "Historically, I think when you take any primary company that moves to acquire a software company, it creates FUD (fear, uncertainty, and doubt)," Testa says, noting that Nortel threw the market into a tizzy when it bought Clarify in 1998.

Looking forward, it's anyone's guess what kind of consolidation, if any, will take place in ECM. Documentum's market share in content management was 6.1 percent last year, according to IDC, while the remainders included FileNet (10.5%), Interwoven (4%), Open Text (1.8%), Stellent (2%), and Vignette (2.8%).

Still plenty to pick from if IBM chooses to counter EMC's move, or if Oracle decides to jump into the ECM game. From a competitive standpoint, EMC has clearly lobbed the ball to the other side of the court.

This feature courtesy of internetnews.com.

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